Fund Managers

ECP seals its largest-ever financial services deal

The Africa-focused firm has acquired 25% of an insurance and banking group in the Cote d’Ivoire in a deal worth just under $50m. ECP is currently raising its third pan-African fund with a target of $1bn.

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Africa-focused private equity firm Emerging Capital Partners (ECP) has completed its largest-ever financial services acquisition, taking a minority stake of around 25 percent in the Nouvelle Societé Interafricaine d’Assurance Participations (NSIA) for $47.7 million.

We can pick and choose with a lot of discrimination.

Tom Gibian

NSIA is headquartered in Cote d’Ivoire and also has operations in six other countries: Benin, Cameroon, Congo, Gabon, Senegal and Togo.  It has a banking subsidiary, Banque Internationale d’Afrique Occidentale, which it acquired in 2006.

Cote d'Ivoire: a nascent insurance market

ECP has a portfolio of eight other African financial services companies, including Continental Reinsurance in Nigeria, Financial Bank in Benin and Blue Financial Services, a micro finance institution headquartered in South Africa. ECP hopes to exploit synergies among portfolio companies, in particular boosting the sale of insurance products by banks.

“Some of the important reforms that have occurred in other emerging markets, which have allowed the financial services sector to grow rapidly, are now being implemented across many African states,” Tom Gibian, chief executive officer of ECP, said in an interview, “The insurance sector has exceptional growth potential.”

The average level of insurance product penetration in Central and West Africa is currently less than 1 percent, the firm said in a statement.

With reduced liquidity in the credit markets, businesses have limited options in terms of accessing capital. This, says Gibian, is producing plenty of opportunities for private equity in Africa. “The global financial crisis has impacted liquidity everywhere including Africa,” Gibian said. “We can pick and choose with a lot of discrimination.”

ECP is currently raising its third pan-African fund, which is targeting $1 billion for investment in diverse sectors. It has so far garnered commitments from LPs including UK government fund of funds CDC Group, which has committed $100 million, and development agency the US Overseas Private Investment Corporation, which has committed $60 million.